Apple to offer old iPhones in bid to produce in India

Apple has put back on the table a request to sell used iPhones in India as it negotiates with the government for concessions to start production in the country.

The company has asked to bring in used iPhones to be refurbished and sold in India, saying it will have the manufacturing infrastructure needed to make them compliant with quality standards, sources said.

The request is included in a list of concessions submitted by Apple to a panel of government officials that includes a 15-year tax holiday.

Apple’s last attempt at such a licence was met with resistance when industry executives and government ministries cited risks such a move would open the floodgates to used electronics and undermine the ‘Make in India’ initiative to encourage local manufacturing.

The world’s most valuable company is exerting its brand influence at the negotiating table as pre-owned devices will be cheaper and target the price-sensitive market.

The company collects a large number of used phones via upgrade schemes in the US and around the world every time it introduces a new device, some of which are broken down into their component bits and others refurbished and sold. India could become a viable destination for many of those gadgets, though local politicians fret that the country could become a dumping ground for aging phones.

“These phones still have life in them,” said Anshul Gupta, Mumbai-based research director at Gartner. He estimates that 70% of phones sold in India go for under $200 (€186). “In India and other emerging markets, buyers cannot afford the flagship model so opt for older generation iPhones whose prices drop.”

If permission is granted, the iPhone maker will become the first company allowed to import and sell used electronics in the country. Apple sold just 2.5m phones last year, about 2% of the market, and a fraction of the 750m smartphones are estimated to be sold by 2020.

Samsung is the biggest selling brand in the country but Chinese vendors Oppo, Vivo and Xiaomi are also winning significant market share.

Apple’s latest request comes as it dangles the prospect of setting up large-scale manufacturing in India. Last week, a regional minister said the company will start assembling iPhones in a facility of its partner Wistron in Bangalore by the end of April. Apple has told officials that its certified pre-owned initiative would meet environmental and quality requirements and also be open for third party-audits and checks.

Bloomberg



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